Innovate Your Innovation Strategy (Part I)

I think of innovation as a big potluck gathering: you know, where everyone brings their favorite—and best—dish. The more scrumptious and imaginative the dishes that are brought to the table, the better and more successful the potluck!

It’s the same with innovation. The best and most durable innovations come when everyone attends the party, bringing wide-ranging and expert ideas from both inside and outside a company. That means suppliers’ ideas are encouraged – and taken seriously.

An article by Scott Anthony, managing partner of the innovation and growth consulting firm Innosight, suggests companies “augmenting” company decision makers with “outsiders who have spent enough time with start-ups to know how to grapple with uncertainty or with subject-matter experts who have spent enough time in a market to understand its nuances.”

This is good, but not quite what I’m getting at: why not make those “outsiders” an integral part of an innovation partnership so that, in effect everyone, company and supplier alike, is an insider in nurturing innovative ideas? Why note make them – well – Vested?

There are some companies that have broken ground on truly bringing “outside in” thinking to life. P&G, McDonald’s and Dell are just a few of the leaders.

The Insight Center examines the execution aspects of innovation—what happens after the birth of a breakthrough idea. There are some excellent insights, such as the “overlooked” value of individual middle managers in executing an innovative idea, and identifying the right problem to solve.

But a common thread that I see is that businesses are company-centric when it comes to innovation, and that’s a problem. John Langley Jr., Supply Chain & Logistics Institute (SCL) Professor of Supply Chain Management and Director of Supply Chain Executive Programs, offers some good insight in the 2013 Third-Party Logistics Study. In the report, Langley says company-supplier relationships simply are “not set up to support innovation. They are tactical rather than strategic, offer insufficient visibility and are limited by metrics, contract terms, and risk mitigation strategies.”

The study continues that it takes “truly collaborative and strategic relationships among all partners to develop the types of disruptive innovations needed to solve the vexing challenges facing today’s supply chains. Current industry consensus is that 3PLs and shippers can facilitate supply chain innovation by leveraging organizational and technology-focused capabilities.”

Luckily companies such as P&G, McDonald’s and Dell are showing the way to truly drive innovation with collaborative. I’ll share those next time in Part 2.